Monday, January 24, 2011

McDonald's is not in the hamburger business

Try to think back to the first time you ever went to McDonald's. What did you have?

My earliest memories of the old one in Kingston have me eating a hamburger, a chocolate shake and small fries in the early-mid '70s. And we ate outside on a round, pebble-ized concrete table.

We didn't have a Burger King or a Wendy's in town back then. McDonald's was competing with the well-established brands of A&W and Canada's own Harvey's. But no matter which one you went to, ordering was pretty simple: some sort of hamburger, fries (or rings at A&W) and a shake or a pop. Not health food by any means, but okay as an occasional treat.

As the '70s wore on, things started to change. I learned early that Kingston was a favourite test market for new products, and I watched as McDonald's introduced a breakfast menu, sundaes, McChicken, McNuggets, and various weird seasonal shakes.

Then in the 80s came experiments like the McRib, the ridiculous Whopper-like McDLT...

Yes, pizza. Of course it didn't work out. But that didn't stop McDonald's from expanding its menu in even more unexpected ways. (Deli sandwiches, anyone?)

From a marketing point of view, it's easy to understand why McDonald's corporate and regional franchisees keep coming up with new menu items. They believe that they need regular product novelty to bring consumers through their doors more often, and to convince them to eat more when they do.

...it’s interesting to note that a majority of operators he spoke with said that the McDonald’s menu has become too big, slowing service times and brand momentum.

McCafé drinks were mentioned by a few operators. Said one: “Yes. Too many choices on McCafé, Angus, chicken sandwiches, and too many sizes—beverages, fries, etc.” The McSkillet Burrito was singled out by others as a particularly slow-selling item. Another operator told Kalinowski: “Menu simplicity is a must for smoothies. All wraps are taking too long but I am not sure I would remove them. All slow selling items need to be reconsidered.”

When Ray Kroc first brought his industrial vision of fast food to McDonald's, his plan was simple:

Ray Kroc wanted to build a restaurant system that would be famous for food of consistently high quality and uniform methods of preparation. He wanted to serve burgers, buns, fries and beverages that tasted just the same in Alaska as they did in Alabama.

But McDonald's official history also uncovers the seeds of this system's downfall:

Ray Kroc believed in the entrepreneurial spirit, and rewarded his franchisees for individual creativity. Many of McDonald’s most famous menu items—like the Big Mac, Filet-O-Fish and the Egg McMuffin— were created by franchisees. At the same time, the McDonald’s operating system insisted franchisees follow the core McDonald’s principles of quality, service, cleanliness and value.

Two of the innovations mentioned — the Big Mac and the Egg McMuffin — did indeed revolutionize the industry. The first introduced a mysterious specialty burger that could be eaten nowhere else. The second was — in my humble opinion — the greatest thing to happen to breakfast since sliced toast.

However, these items opened the era of McSperimentation, and we know where that can lead...

I wouldn't be the first person who has written that McDonald's is a confused brand that is letting its core product get away from it. But with chains like Five Guys arguably making much better fast food burgers, perhaps even thinking of McDonald's as a plain old hamburger place is old fashioned.

You could even say that the McDonald's brand outgrew its product offerings long ago. When you can order a McBeer in Italy, and you can't order beef at all in India's Mcdonald's, how can a single brand represent all that diversity?

The answer, of course, is the experience of going out for cheap junk food. Of any kind. And somehow equating that with having good times among family and friends.

3 comments:

McDonalds is primarily in the real-estate business. Typically, they own the land, and then rent it to the franchisees for a variable charge that takes sales into account: http://en.wikipedia.org/wiki/McDonald's#Business_model